Question 1: How would you define the following costs: direct materials, indirect materials, direct labour, indirect labour and factory overhead?
Question 2: Distinguish prime cost from conversion cost. Does prime cost plus conversion cost equal the total manufacturing cost?
Question 3: In what way does the accounting treatment of factory overhead differ from that of direct materials and direct labour costs?
Question 4: What are the distinguishing characteristics of variable, fixed and semi-variable factory overhead costs?
Question 5: What effect does a change in volume have on total variable, fixed and semi-variable costs?